Keir Starmer stresses 'full confidence' in Reeves as PM 'refuses' to say if she'll stay chancellor at next election
13 January 2025, 15:51 | Updated: 13 January 2025, 15:53
Sir Keir Starmer has insisted that Rachel Reeves has his “full confidence” as the chancellor faces growing pressure for Britain's turbulent economy, but refused to comment on her future position as Treasury chief.
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The prime minister’s defence of the chancellor comes as the pound plunged in value, the lowest against the dollar since November, while concerns over increased government borrowing mount.
Meanwhile, 30-year government bonds jumped to a fresh 27-year high, extending a gilt market sell-off into a second week just as the Chancellor touched back down in Britain following her China visit.
Sir Keir said Ms Reeves has the whole Labour Party behind her as turmoil in the markets erupts.
Speaking at the launch of the government’s artificial intelligence action plan, he said: “Rachel Reeves is doing a fantastic job.
“She has my full confidence. She has the full confidence of the entire party.”
Read more: UK will be ‘AI superpower’, says Starmer as he unveils plans to boost growth
He added that she was “given an incredibly challenging job at the budget” due to a broken economy and a £20 billion fiscal black hole he claims was left behind by the Tories.
Sir Keir argued there are “many, many things that have been identified for spending which didn’t have any spending attached to them.”
He continued: “So she took the tough decisions. She’s right to take the tough decisions, because, as anybody who’s turned around a business or organisation will know, if you’re going to turn something around, you’ve got to take the tough decisions first, you can’t identify a tough decision, then decide to put it off for six months or a year.”
The prime minister also refused to clarify whether Ms Reeves would still be his chancellor by the end of this parliament.
When asked for a simple “yes” or “no” response, he swerved the question with a remark on Reeves’ commitment to her fiscal rules.
Sir Keir told reporters: ““We are going to stick to the fiscal rules, that is a very important thing that we have said throughout. We set out those fiscal rules very early on in the day because we knew that the missing ingredient in recent years has been economic stability.”
Critics have warned this could risk spooking the markets at a time when government bonds are at the highest level they have been in nearly 30 years.
Concerns about inflation and the imminent Donald Trump presidency have prompted turmoil on global markets in recent days. The pound at 9am today was 1.2141 dollars compared to 1.2212 dollars at the previous close.
An unnamed Labour MP told the Telegraph Sir Keir's refusal to comment on Ms Reeves’ future position was a ‘bad mistake’ which he could ‘repent’.
But other Labour figures have leapt to her defence.
Cabinet Office minister Pat McFadden told LBC this morning that Ms Reeves’ Budget had taken some ‘punches’ but that it would help raise money for public services.
He told Nick Ferrari: “Rachel Reeves is the Chancellor for a good reason. She is the person qualified to do the job.“When we came into office six months ago, we came in as a good team , we didn’t have any of the rivalries and things that had afflicted other governments and we govern as a good team.
“Rachel Reeves is doing a good job with the support of the whole Cabinet.”
Ms Reeves has also vowed to stand by her fiscal rules laid out in the October budget, calling them “non-negotiable”.
